Grocers scramble after 'skulduggery' in survey

Fur is flying in supermarkets after price-rigging to fool customer watchdogs meant groceries had to be bought undercover to save the credibility of an annual survey.

The revelation by Consumer's Institute left the Foodstuffs organisation distancing itself from "cheating" by its Dunedin Pak 'N Save supermarket.

But the institute also chided rival Progressive Enterprises yesterday for exaggerating the results of its latest annual survey, which it decided to rerun because of fears of widespread price manipulation.

The institute's sleuths in past years simply jotted down prices from supermarket shelves after announcing their presence "as a courtesy" to managers.

But the institute became concerned at claims by ex-staff of several supermarket chains that prices were marked down as word went out that the survey was on.

"The telephone tree started immediately and then prices would be altered," institute chief executive David Russell said.

This year, with suspicions heightened by a wide gap between prices at the Dunedin's Pak 'N Save and those of its competitors, the institute decided to go undercover to combat what it condemned as "supermarket skulduggery."

The institute says prices surged back up after the surveyors left the store - from 95c to $1.35c for baked beans, 95c to $2.35c for bread and 99c to $1.55c for a cauliflower.

So it scrapped its paper survey of more than 140 items, and sent its investigators back to pose as real customers gathering groceries at 27 supermarkets in five cities, although the list of items had to be slashed to 30 at each supermarket to avoid clogging up checkouts with conveys of trolleys.

Mr Russell said the tactics were necessary to protect the survey's credibility.

This followed claims by both Progressive and Foodstuffs that the other was manipulating prices.

He said the items surveyed were all products likely to be discounted in supermarket price wars, and the payoff was the hard evidence of till receipts.

The Dunedin Pak 'N Save still ended up the cheapest supermarket in the survey, even after a 19 per cent increase from the abandoned earlier exercise, but owners William and Chris McDonald kept themselves unavailable for comment yesterday.

Foodstuffs national and Auckland managing director Tony Carter distanced the organisation from the franchise's tactics but suggested the brothers were not the only grocers in that city to adjust prices for the survey.

He said the organisation's South Island division had gained an assurance from them that they would not do so again.

"It was certainly not a Foodstuffs initiative and we very much regret that happening," Mr Carter said.

"At the end of the day they don't have to cheat because they are the cheapest and that's what makes me so frustrated about the whole thing ... "

Rival Progressive called the Dunedin deception a "sign of desperation" against efforts by its own Countdown discount chain to match Pak 'N Save stores.

"We are hot on their heels to match them on price and our shoppers get a superior service," chief operating officer Richard Umbers said.

But Mr Russell accused Progressive of misconstruing his survey's findings with a claim that it showed "budget customers can now get a better offer at Countdown."

"We strongly refute that claim," he said, pointing out that Pak 'N Save prices were still the lowest in each of the five cities surveyed.

Although Countdown is close behind Pak 'N Save in Dunedin and Christchurch, it remains 7.15 per cent dearer in Auckland and 8.25 per cent in Hamilton.